Australian Treasurers Face Off In Tax Debate

by Mary Swire, Tax-News.com, Hong Kong

25 October 2001

Peter Costello, Treasurer in Australia's ruling coalition government, yesterday said that the Opposition had now made spending promises worth more than $4.2bn during the country's election campaign; but his Australian Labour Party shadow Simon Crean simply said that the ALP would raise funds by cracking down on tax avoidance.

The exchanges came during a debate between the two men at the National Press Club in Canberra. Peter Costello focused on Labour's past spending record, and reminded the audience that the ALP had similarly promised to improve tax collections before the 1996 elections.

Mr Costello concentrated his attacks on the ALP's proposal to use low-interest loans as a policy instrument, which he said merely represented concealed spending, and would send the budget into a deficit if correctly reported.

Mr Crean said that the Coalition itself had used low-interest loans, and was able to score a point off the Treasurer when Mr Costello said that there should be no exemptions from the GST:

"There is no point in a broad-based consumption tax with exemptions," Mr Costello said. "Every exemption means the tax base grows more slowly than the economy and the money has to be made up elsewhere in the tax base."

This was a gift for Mr Crean, who said it was "code" for the fact that Mr Costello now had a secret agenda to extend the GST and increase the rate.

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